On October 30, 2015 AbbVie (NYSE:ABBV) reported the company’s long-term strategic and financial objectives, including expectations for growth and other financial metrics over its long-range plan, through 2020 (Press release, AbbVie, OCT 30, 2015, View Source;p=RssLanding&cat=news&id=2104612 [SID:1234507848]).

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"AbbVie is well-positioned to deliver strong top- and bottom-line performance through 2020 and beyond," said Richard A. Gonzalez, chairman and chief executive officer, AbbVie. "We have built a strong foundation, establishing growth platforms in some of the largest and most attractive market segments. And, we have a robust and compelling pipeline which will contribute significantly to our performance over our long-range-plan."

Based on continued strong performance from its existing portfolio of on-market products, including its flagship brands HUMIRA and IMBRUVICA, as well as growth from pipeline products, the company is providing guidance for total company sales of approximately $37 billion in 2020. This reflects roughly 10 percent sales growth, on average, over the five year period. This guidance includes estimated global HUMIRA sales of more than $18 billion in 2020, which the company believes appropriately captures the expected biosimilar dynamics globally. Additionally, the company is projecting its IMBRUVICA revenue will reach approximately $5 billion in 2020, driven by continued growth within the hematologic oncology market.

Since becoming independent, the company’s significant focus on operating efficiencies has resulted in strong improvement of its gross and operating margin profiles. AbbVie is committed to driving continued expansion of operating margin, and is targeting an adjusted operating margin of greater than 50 percent by 2020, with an average of 100-200 basis points of improvement per year. In 2014, AbbVie’s adjusted operating margin was 36.2 percent. Expansion will be driven primarily by ongoing cost savings initiatives, product mix and a reduction in royalty expense associated with HUMIRA in 2017 and 2018. Additionally, the company will drive continued sales leverage from a rapidly growing top-line.

"Our commitment to top-line growth and continued operating margin expansion will drive double-digit earnings-per-share growth on average through 2020," said Richard A. Gonzalez. "AbbVie’s fundamental strategy is strong and we are well-positioned to deliver top-tier financial performance in the years to come."

Company Issues Strong Full-Year 2016 Outlook

AbbVie is issuing diluted earnings-per-share guidance for the full-year 2016 of $4.90 to $5.10 on an adjusted basis. This outlook represents strong double-digit growth versus 2015 and positions AbbVie to be among the industry leaders for growth again next year.

The company will quantify 2016 intangible asset amortization expense and other specified items at a future date.

Company Announces Plans to Host R&D Day

Through internal research and development efforts and strategic licensing and acquisition activities, the company has built a robust pipeline of medicines, with the potential to deliver nearly $30 billion in nominal sales by 2024 (excluding new HUMIRA indications, new IMBRUVICA indications and next-generation HCV, which are considered on-market products for this calculation).

The company is on track to launch more than 20 new products or indications through 2020, including seven approvals that will contribute in 2016 and beyond, including:

IMBRUVICA indication expansion, including first-line chronic lymphocytic leukemia (CLL)
HUMIRA indication expansion, including hidradenitis suppurativa (HS) and uveitis
VIEKIRA approval for genotype 1B patients in Japan
Venetoclax for relapsed/refractory CLL patients with the 17p genetic mutation
Zinbryta for relapsing remitting multiple sclerosis
Elotuzumab for relapsed/refractory multiple myeloma
AbbVie plans to host an R&D Pipeline Review in Chicago during the 2016 ASCO (Free ASCO Whitepaper) meeting. At the event, the company will provide comprehensive detail regarding its research and development programs, including its core programs in immunology, oncology, virology and neurology, in addition to its late stage efforts in women’s health and renal disease, as well as the company’s outlook on the commercial potential of these assets.

Company Declares 12 Percent Dividend Increase

AbbVie also announced today that its board declared an increase in the company’s quarterly cash dividend from $0.51 per share to $0.57 per share beginning with the dividend payable on February 16, 2016 to shareholders of record as of January 15, 2016. This reflects an increase of approximately 12 percent, continuing AbbVie’s strong commitment to returning cash to shareholders through a growing dividend. Since becoming an independent company in 2013, AbbVie has increased its dividend by more than 42 percent.